“It is very important to understand how China works. It runs on Soviet hardware, but on Chinese software”, said the renowned Australian researcher. He emphasized that China’s power comes from its economic strength developed during the last five years. While the Belt and Road Initiative is increasingly becoming an empty concept, China extended its trading relations throughout Africa, Eurasia, and the Asian-Pacific region in the last few decades. Russia is no exception. Despite the war, trade between the two countries is blooming. “I think China want to have Russia for future battles”, said McGregor. The researcher pointed out that the amount of Chinese investment in foreign countries is likely to decrease compared to the last decade, while the existing trading partnerships continue to flourish.
“China starts to translate its economic power to the military”, emphasized McGregor. He pointed out that the size of the Chinese navy is already bigger than the American. The goal behind this strategy is clear: wanting to become bigger than the US and dominating the region. The Xi Jinping era is characterized by the popular phrase among political leaders: “the East is rising, the West is declining”. The researcher showed by analysing political speeches that a growing confidence can be observed among Chinese leaders and the US-China confrontation is becoming a clearly communicated aim within the Party.
Xi distanced himself from his predecessors by making clear that he values loyalty over meritocracy and he is a leader for life who would like to achieve the technological independence of China. He is not just the president of the state, but also the chairman of the military, the head of all policy-making groups, and the general secretary of the Party. “Xi has completely changed the political system. The Party does not only sit above the government, but above the law”, the lecturer explained. He has no successor, but the political system is so widely present and well-established that it would probably continue working if he suddenly passed away.
The Party also works inside companies because Xi broadened its base which entrepreneurs can join too. “Sitting behind the board is the Party Committee, also in foreign companies that are present in China, like Walmart, Daimler Benz, and Disney”. Despite the political influence, the Chinese economy also has to face situations that are harder to control. The level of individual property is high, and the population is continuously declining. In the last 15 years, the one-child-policy was not working anymore, but estimations suggest that there will be 120 million fewer workers by 2040. “The Chinese economy is not going to collapse, but it will have a much lower level of growth”, the researcher claimed.
Richard McGregor is Senior Fellow for East Asia at the Lowy Institute, Australia’s premier foreign policy think tank, in Sydney. He is a former Beijing and Washington bureau chief for the Financial Times and the author of numerous books on East Asia. Richard is a Senior Associate (Non-resident) at the Center for Strategic and International Studies (CSIS) in the United States. He was also a visiting scholar at the Wilson Center and George Washington University in Washington DC from 2014-2016.